Industry (Government Support)

Lord Jackson of Peterborough Excerpts

Wednesday 16th June 2010 Commons Chamber

[Nicky Morgan]

I entirely agree with my hon. Friend. Manufacturing has fallen at a faster rate over the past 13 years than in the 1980s. The hon. Member for Birmingham, Erdington (Jack Dromey) spoke about the need for a balanced economy, but the previous Government had 13 years to achieve that. I welcome the fact that the Conservative-Lib Dem Government’s coalition agreement says that there is a need for a balanced economy.

[Mr Stewart Jackson (Peterborough) (Con)]

My hon. Friend makes a powerful case. Was not the entire strategy of the former Labour Government predicated on three things: the housing market, the growth in financial services and public sector expenditure increases? All were found wanting, and manufacturing and other sectors were neglected.

[Nicky Morgan]

I entirely agree with my hon. Friend. I noticed a certain amount of eye rolling when an earlier speaker mentioned that she had worked in the financial services industry. As my hon. Friend has pointed out, however, the financial services industry’s growth over the past 13 years was huge. We will not take lessons from Labour Members in that regard.

In referring to industry, I think that Labour Members have been talking about larger companies—perhaps I will be corrected—but most people in this country work for smaller businesses, and in some cases very small businesses. They are the backbone of our economy, and their growth will drive the economy out of the current situation.

I want to talk about three aspects of support for business, some of which have been referred to already. First, more bank lending to businesses is necessary. As chamber of commerce research shows, small businesses are being penalised with higher rates of interest. In my constituency, two gentlemen running a small industrial company who rightly took out a mortgage to buy premises in 2007—when lenders were falling over themselves to lend their company money, as it was a very sound bet and had never failed to make repayments—have suddenly been told by the building society in question that the property has fallen in value and that the ratios are therefore wrong, so they will have to renegotiate the mortgage and pay higher interest rates that are clearly beyond them. That is exactly what banks should not be doing at this critical time in the economic cycle when businesses need support.